RWC adds DFM share class to Convertible Bond fund

RWC is adding a distribution share class to its Global Convertibles fund in response to demand from UK discretionary fund managers (DFMs).

Fund manager Davide Basile has just completed three years on the fund, which has $1.2bn in assets under management. He also runs the RWC Asia Convertibles fund, which launched in June 2011.

Dan Mannix (pictured), head of business development, said: “In recent years, UK DFMs have really embraced convertible bonds as part of balanced portfolios. As the need for income has become paramount in investor’s minds, we are launching a distributing share class to meet this demand.”

Basile said convertible bonds are a sensible asset to own in the current market environment, because they offer superior return potential and can “insulate the investor form spikes in market volatility.”

“The macro environment looks set to provide a favourable backdrop for convertibles as the asset class may be among the beneficiaries of the reallocation out of fixed income given the low duration combined with conservative equity exposure,” he said.

“Although there are also some great prospects in equities, we remain aware that there are going to be significant political events that could destabilise markets.”

At the moment Basile is favouring the US from an asset allocation perspective, but is continuing to monitor developments in the eurozone.

“The US is among our preferred regions as we have seen the beginning of the housing recovery, which is generally feeding into improved economic data,” he added.

He remains cautious on Europe because of political risks, preferring to make bottom-up stock selection calls in the region.